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2016 (5) TMI 820 - AT - Income TaxAddition towards commission on accommodation entries - taxability in the hands of assessee - Held that:- No evidence has been brought on record by the revenue to prove that the transactions of 24 companies with Bhushan group of companies are accommodation entries. No material has been brought on record to prove that the said companies were actually engaged in providing accommodation entries. No material has been found in search or survey to conclusively establish that all the 24 companies are dummy and the assessee had managed and controlled their financial affairs. The Learned AO had alleged that cheques were issued in lieu of cash received. But then, there was no recovery of unaccounted cash during the search or survey operations.No evidence has been brought on record by the revenue to prove that the assessee had earned commission income @ 0.55% on these alleged accommodation entries. Moreover, the receipt of commission income of ₹ 1.66 crores for all the asst years put together as assessed by the Learned AO is not matched by recovery of undisclosed assets or documents indicating undisclosed expenditure which were found during search and survey operations. No material was found in search and survey operations which would prove that the assessee was managing or controlling the 24 companies except placing reliance on statements of certain employees of those companies which were later retracted by them. No material has been brought on record by the revenue to prove that sufficient action was taken by the revenue on the employees who had retracted the statements and who had also originally offered to pay tax on the commission income derived by them. No examination was carried out by the revenue with Mr.R.K.Gupta , Vice President and Company Secretary of M/s Bhushan Power & Steel Ltd who had addressed a letter dated 10.2.2010 stating that documents like memorandum of sale of shares, delivery of share certificates etc are being sent for getting signature from directors of respective companies of Mr.S.M.Nahata. This letter was admittedly addressed by Mr.R.K.Gupta to one of the employee of those companies which were found in the office premises of the assessee. The assessee had already demonstrated the circumstances under which the papers of those companies had come to his possession i.e in his professional capacity. No evidences has been brought on record by the Learned AO except alleging that the money was routed in the bank account of the companies through other bank accounts. But then the onus was on the Learned AO to discover such bank accounts and establish the money trail.The Learned AO has failed to point out any bank account in which cash was initially deposited. The ROC website does not contain the nature of transactions except containing the balance sheet, list of directors and shareholders. Hence from the said website, it is very strange that how the Learned AO was able to conclude that the transactions are accommodation entries. The valuable assets found during the search and survey such as cash and jewellery have been properly explained by the assessee and no addition has been made on that account by the Learned AO. The details of 21 bank accounts were also found in the search and survey operations which were explained at the assessment stage that all the bank accounts were duly disclosed in the regular books of accounts of account holders which has been accepted by the Learned AO. There was no discovery of any bank account wherein the commission allegedly received by the assessee was found deposited.The entire addition has been made by the Learned AO only based on mere suspicion, surmises and conjectures.- Decided in favour of assessee
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